Bajaj says he can fund MUL acquisition easily

Bajaj says he can fund MUL acquisition easily
ENS ECONOMIC BUREAU

New Delhi, Nov 23: Bajaj Auto chairman Rahul Bajaj on Thursday said that with the company’s cash position of Rs 1,700 crore and zero debt, he can easily find cash for a 50 per cent stake in Maruti Udyog Ltd at a reasonable price.

“However, it has major implications on my bottomline and any decision will have to be taken keeping shareholder benefit in mind,” he told Reuters. Bajaj is eyeing for the government’s 50 per cent stake in Maruti.

Bajaj is open to talks with Suzuki, which holds 50 per cent equity stake in Maruti, for becoming its partner in the company. The joint venture agreement between the government and Suzuki stipulates that “no shares held by the government may be transferred by the government to any party unless written consent of Suzuki has been obtained prior to the consummation of such transfer.” Though there is a strong speculation in the industry that Bajaj may bid for Maruti in association with GM of the US, he denied that he was in talks with any international automobile company.

Bajaj met heavy industries minister Manohar Joshi recently to convey his interest in Maruti. Sources said he had also met Union law minister Arun Jaitley a few months ago, when he was disinvestment minister. The government’s plans to sell its stake in Maruti, the country’s largest carmaker, are likely to attract a flock of eager bidders and could net the government as much as Rs 2,500 crore ($534.2 million), analysts say.

And though its market share has slipped to 54% from nearly 80% two years ago, it still would be an attractive buy for any automobile firm. “It is still a fantastic company. It makes ample sense for any company to buy into its equity,” said an analyst at a European investment bank who declined to be identified. Maruti’s attractiveness lies in its dominant position, large dealership network, pool of component manufacturers and spare parts suppliers and the growth potential of the market, analysts say.